Cross-border protocols in insolvency or restructuring

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Cross-border protocols in insolvency or restructuring
  • Rationale
  • Benefits of protocols
  • When are protocols useful?
  • General principles
  • Typical parties
  • Limitations
  • Typical contents

Cross-border protocols in insolvency or restructuring

Rationale

In certain cross-border restructuring or insolvency cases, a protocol between the relevant parties in each different jurisdiction may help co-ordinate the overall process, reduce costs and so increase returns generally for creditors as a whole, wherever located.

Protocols are generally written agreements (although occasionally may be oral) dealing with actual and/or potential matters of conflict and can also be called a:

  1. cross-border insolvency agreement (see the UNCITRAL Practice Guide)

  2. compromise agreement

  3. memorandum of understanding

There is no set format for protocols and one of their main benefits is that they can be tailored to fit the circumstances of each case. UNCITRAL has produced a helpful Practice Guide, providing information for practitioners and judges on practical aspects of co-operation and communication in cross-border insolvency cases which includes sample clauses for protocols. It is not intended to be prescriptive, rather to illustrate how the resolution of issues and conflicts could be facilitated.

Most protocols to date have been drafted in English or English and one other language, though obviously these may need to be translated into several different languages depending on the jurisdictions involved. For an example of a cross-border protocol, see Precedent: Cross-border protocol for insolvencies or restructurings.

Benefits of protocols

The main benefits of protocols include their ability to:

  1. produce a co-ordinated approach between different courts and office-holders

  2. address the recognition of rights and

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